Federal Minister for Planning, Development and Special Initiatives Asad Umar said on Friday that the growth rate for the next year had been estimated at 4.8 per cent.
Addressing a press conference in Islamabad on the annual budget plan, Umar said: "Next year's growth rate of the economy has been estimated at 4.8pc which has increased from 3.94pc for this year."
The National Accounts Committee had last week estimated Pakistan’s provisional GDP growth for the current fiscal year (2020-21) at 3.94pc, supported by a broad-based recovery in major sectors.
The federal minister said that there were six to seven big sectors the future growth rate was coming from. The first he said was cotton production which was badly affected in the past and in the current year as well due to which "we face a lot of loss."
"This year, arrangements have been made for better [quality] seeds and emphasis has been placed on provision of good quality pesticides," he said, adding that cotton prices in the international market were also seen to be better. He said that due to all this, an estimate of 10.5 million bales of cotton had been forecasted for neat year.
The second sector, according to the federal minister, was poultry and livestock. He said the poultry sector had been badly affected by Covid-19 in particular which had caused a price hike but it would contribute to growth in the future as it moved towards normalisation.
"Apart from that we are also seeing an increase in electricity consumption of 6pc [...] we got a very amazing response from the industrial incentive package we gave and there has been an increase of 15pc in industrial consumption since we gave the package."
He said the government forecasted that this demand for electricity would keep increasing into the next year and this was also contributing towards growth. Umar added that efforts to increase production of other fuels such as natural gas and coal for increased power production were also underway and those would also contribute towards growth.
Umar particularly highlighted the construction industry as a major reason for growth and which had been "championed" by Prime Minister Imran Khan because it provided the most employment opportunities in the cities and which affected industries the most.
"One reason for the industrial growth you are seeing is construction and it has started to pick up," he said, adding that a sustained growth in the sector was being seen and it would become a "driver" of economic growth.
The federal minister next came to what he termed the "jugular vein" of the economy — exports. He said that exports for the current fiscal year were $25.2 billion and these were estimated to grow to $26.8bn in the next year. He said the current year's exports were the highest for the past 10 years and the target for next year would be "the highest exports in Pakistan's history."
Concerning remittances, he said the government was not factoring in as strong a growth compared to the current year's and remittances were projected to grow from $29.1bn to $31.3bn.
Umar pointed out that one sector in particular which was seeing very high growth was the IT sector and digitisation. He said it had been a major target of the government, many incentives were provided for it and key milestones had been achieved which had led to a boost to digital commerce and the growth in IT exports was projected to continue to the next year.
Lastly, the federal minister said that the budget for the Public Sector Development Programme (PSDP) was also being increased from Rs650bn this year to Rs900bn. Umar emphasised that this increase would have a direct effect and it would serve to bring in investment and thus impact overall economic activity. "An increase of 0.25pc in GDP will come just from this PSDP increase."
Returning to the 4.8pc estimate, he said a good estimate was one which had a certain range for either increase or decrease. "In my opinion, the chances of it going higher are more and this growth [figure] is giving the signal that the momentum of the [economic] revival which had started is steady, is continuing and will continue to increase next year."
Umar said that sustainable growth was being witnessed and the current year's 3.94pc growth was also driven by productive sectors such as increase in crop production and large-scale manufacturing instead of being consumption-driven growth.
"If you listen to our policy statements then all the direction was to bring a sustainable path and bring growth from productive sectors, exports."